ZERO DEPOSIT RENT
The rising cost of living is not good for tenants
Zero Deposit Rent offers a new way for prospective tenants to rent smarter, to free up their money - and better control their financial security.
Its a solution on the other side of the spectrum where landlords aim to protect themselves from defaults or damage by charging up to two or three months rental as a deposit.
This practice may well be too prohibitive at the time for fantastic potential tenants. Furthermore, there is no evidence that tenants who outlay that kind of deposit dont default; nor is it any actual indication that they are more likely to look after their rented home well.
Zero Deposit Rent supports a usually great tenant, by giving them a much-needed opportunity to steady their finances - and avoid the proverbial downward spiral into default.
Theres no doubt that a zero deposit lease is a very appealing option for the prospective tenant, no matter what their income level. As this kind of innovation takes mainstream hold, it is going to be impossible for agents and landlords to compete for the cream of the tenant crop - while offering traditional leases that are heavily laden with costly deposits.
There is also no need, as the security offered by a traditional deposit is truly limited and one-dimensional. Tenants are already turning their attention to zero deposit leases - its now up to agents and landlords to explore more innovative, multi-dimensional letting solutions that offer them enhanced security while keeping the rental option affordable and attractive for their tenants.
The very simple Tenant Application Process is as follows:
- Complete & Submit the Online Form via the Find-a-Home link below to Register for your Rental Affordability Certificate. This will provide you with the Monthly Amount for which you have been Pre-Qualified to Rent the next Home of your Dreams.
- Once you have Located the Property you Wish to Rent, Contact Us and well Negotiate & Facilitate the Lease Agreement - with the relevant Letting Agent, or directly with the Private Landlord.
- Because you have been Pre-Approved on Affordability and Payment History, you will not have to pay an Upfront Deposit when Signing the Lease and Taking Occupation.
Tenant Registration - Click Here to Download the Tenant Pre-Qualification Form
Find-a-Home - Click Here to submit your Property Requirements.
Now your rent can buy ANY Gauteng home priced between R400,000 to R1.8-million
Tenants battling to pay their rent and save for a deposit for their new home can now use their rent to buy their new home.
Uniquely, this product is available for all approved properties in Cape Town and now also in Gauteng, priced from R400,000 to R1.8-million.
Rent2buy is the brainchild of residential market innovator and attorney, Meyer de Waal, who has worked tirelessly to include any approved property for sale in the market currently.
“Pre-approved potential buyers identify the home they wish to purchase - and we assess whether it is correctly priced,” says de Waal. “If it ticks all the boxes, our financier purchases the property and we enter into an instalment sale agreement with the buyer who ‘rents’ the property for 24 months.”
Estimated rental per month
Qualifying buyers’ monthly rental will be calculated as follows:
Your purchase price x 14.4% x 1/12. This is what it looks like on paper (estimated):
- Purchase price of R1,800,000 x 14.4% = R21,600 per month
- Purchase price of R1,500,000 x 14.4% = R18,000 per month
- Purchase price of R 900,000 x 14.4% = R10,800 per month
- Purchase price of R 600,000 x 14.4% = R7,200 per month
- Purchase price of R 400,000 x 14.4% = R4,800 per month
The benefit is that the purchase price will remain the same for 2 years to give a Rent2buy buyer the time to get his or her “bucks in a row” and credit approval resolved to apply for a normal home loan.
Besides the great opportunity Cape Town and Gauteng buyers from R400,000 to R1.8-million have to own their very own home within two years, the original purchase price remains static.
To put this into context, the City of Cape Town’s house prices grew on average 11.4% year-on-year in Q3 2017, according to FNB household and property sector strategist, John Loos. Gauteng’s house price growth, on the other hand, is ambling along at less than 5% growth on average.
Rental payment monitor, Payprop, reports that in Q3 2017, landlords nationally increased their rental by 4.94% year-on-year.
Tenants in the Western Cape and Gauteng, however, saw their rental hiked on average by 10.2% and 7.9%, respectively.
How are tenants, therefore, able to sufficiently save for a deposit amid above-inflation rental hikes and rising house price growth, steadily taking away their homeownership aspirations.
Do you want to own your own home?
“Are you almost ready to buy your own home but you’re struggling to obtain a home loan for the following reasons:
- Not granted a 100% home loan and need to save for a deposit?
- Minor problems on credit status (arrears accounts that can be settled in a short timeframe)?
- ‘Lowish’ credit score and need to build up a good/excellent score?
“Then Rent2Buy Finance might be the solution,” says de Waal, noting that applicants under debt review, administration, sequestration, or those who have judgements will need to supply a clearance certificate to prove the process is completed or almost completed.
HOW DOES IT WORK AND HOW DOES ONE GET STARTED?
A Rent2buy purchaser must first be pre-qualified by the Rent2buy team and then will receive a certificate of affordability to go out and find his or her own property to buy - in the City of Cape Town or Gauteng approved areas.
Find your home
Once you find the property that you want to buy, send the information to the Rent2buy team by email.
Rent2buy negotiates the deal
The Rent2buy team contacts the seller or estate agent and negotiates the deal, evaluates the property and purchases the property.
Consider the terms and conditions
A Rent2buy quote will then be submitted for a Rent2buy buyer to consider and accept.
The property finance team will review the application and do their own valuation of the property to ensure it is not overpriced.
You will then sign a Rent2buy agreement [Rent2buy option and Rent2buy Purchase Agreement] based on the terms and conditions provided and accepted by yourself.
The Rent2buy purchaser will then have a 2-year period to get his or her “bucks in a row” to apply for a home loan and acquire the property through the Rent2buy contract. Terms and conditions will be provided.
Rent2buy personal trainer - get “bond fit”
During the Rent2buy term, the Rent2buy buyer needs to participate in the Rent2buy programme to work towards a home loan qualification with the Rent2buy Personal Trainer.
HOW DO I APPLY?
The Rent2buy purchaser will need a deposit of ± 6% towards the purchase price and costs - full terms and conditions will be provided. This deposit is paid on signature of the Rent2buy agreement.
The deposit of ± 6% x the purchase price is calculated as follows:
A portion to cover 2 x months’ rental. It is refunded back to the purchaser at the end of the Rent2buy term once damages [if any] are deducted at the outgoing inspection.
A portion to cover the transfer costs of buying the property, such to cover the conveyancing fees and transfer duty.
This will depend on the value of the property.
These are direct expenses and not refunded to the purchaser.
The purchaser pays no transfer duty once he/she takes transfer of the property after the 2-year Rent2buy term, only conveyancing fees and bond registration fees.
The balance is an Option fee. This is refunded back to the purchaser at the end of the Rent2buy term if all terms and condition are met, but forfeited if not to continue with the Rent2buy purchase and taking transfer.